August 30, 2014

To rent or not to rent, that may be the question.

I am just curious as to whether B Voice readers have an opinion about this. Seems a handful of renters, no doubt rallied by the letter writer, appeared at the last Burlingame City Council meeting to tell the council that the housing plan should cater more to renters in Burlingame. Below is the letter as it appeared in the SMDaily Journal.

Should the housing plan cater more to renters or should we let market forces dictate what Burlingame looks like? Keep in mind that statistically Burlingame has approximately 52% rentals vs. owners.

Editor,

The topic of whether or not ABAG numbers are realistic is moot, as both Mayor Michael Brownrigg and Vice Mayor Terry Nagel implied (“Faulty population numbers may influence housing” in the Aug. 20 edition of the Daily Journal). The real story not even mentioned in your article is the growing clamor for affordable housing. Over 20 renters from Burlingame attended the council meeting, some of them courageously telling personal stories of impossible rental increases and impending displacement. We also heard from highly knowledgeable speakers from Peninsula Interfaith Action (now PIA/SFOP), the Housing Leadership Council and Urban Habitat.

Renters in Burlingame and other Bay Area cities are under assault and they are starting to fight back. Homeowners enjoy the protections of mortgage interest deductions, Proposition 13 tax breaks, and many other financial benefits. Renters, on the other hand, pay their landlord’s mortgage interest, property taxes, sewer and water bond assessments and maintenance costs; yet they are regarded as second-class citizens, with absolutely no protections from egregious rent increases. Low-income seniors and disabled people are suffering the most. Something has got to happen now to stop the bleeding.

I urge all renters to come together to work toward solutions in their communities, and demand acknowledgment, respect and action from their elected leaders.

Comments

If I hadn't a bought my house here years ago I would not be renting anywhere on the Peninsula these days.
If I didn't have a job that held me here I would simply move to a cheaper part of the state. My mortgage is about the same as what my daughter pays for a studio apartment in Burlingame.

Does anyone mourn the evil landlords when the "prosperity bubbles" burst? Does anyone say, you know, those landlords took on a lot of debt and risk to buy that property--maybe they should get a subsidy when there's an economic downturn? yep, didn't think so.

JFW, no one that I'm friends with thinks landlords are evil. Yes, that's where your family decide to invest its retirement savings, or perhaps as a choice in managing your family's wealth.

People are concerned about gouging existing tenants, both commercial tenants and residential tenants. Some great examples of attempts at 30% increases for office and restaurant spaces around Burlingame Ave, which resulted in true pioneering tech companies leaving Burlingame for SOMA just as they hired a bunch of new employees, or that favorite restaurant with a charming owner who moved south with his business.

People are concerned about the careful Burlingame/local public hearing/planning process being secretly trashed via the douchebag...I mean ABAG city consortiums where otherwise nice guys like Michael Brownrigg support Union-Make-Work dumb projects like The Grand Boulevard Initiative in the name of [Green is the new Red] the environment. GBI is generally not wanted by probably 80%+ of Burlingamers in my estimate.

Tough sh*t - The Unions are in charge because YOU voted the Democrats into power and boy did those politicians make big promises during that endorsement interview and subsequent Honorarium speeches.

That's why I like the Libertarian perspective instead. It's like Ben Franklin...common sense. Tolerance for other people's perspectives and great respect for the individual rights of others...and just as much honor for individual responsibility and work ethic.

Certainly, we respect the environment, but we're not going to bake income /wealth redistribution into Green Monster-veiled Agenda 21 and its hideous offspring, ABAG and GBI and HSR.

Fred, modern day Libertarians are not 100% laissez-faire. It's much more about limited government, fiscal responsibility, and social tolerance.

Besides, I'm speaking out against Union bullying and their lack of tolerance for any perspective but their own. It's either their way or they'll back stab you...proudly.

I'm also speaking out against the terrible culture that the is created when minority perspectives are stamped out by the Dem Super Majority (aka Unions).

Unions SHOULD exist, but they should not disrespect other's perspectives and frequently disregard the law (see HSR illegal actions), and actually encourage their members to use "Rules For Radicals" backstabbing on anyone that doesn't obey their whims.

I'm pointing out again that "Honorarium Creo Factum"...that local politicians have admitted in front of me and other witnesses (two separate times) that they get paid money to support Union agendas, which is actually illegal. But, the good people of Burlingame and California keep voting these folks back into office. Hey, even Leland "Shoulder-Fired Rocketlauncher" Yee got over 200,000 votes. Good job, Dem voters.

I'm also calling for people to remember integrity and love thy neighbor ethics among the negative culture of the backstabbers.

It's been a long time since I've taken Latin folks (yes, Bruce Dickinson was trained in the Classics), but I would be remiss if I didn't point out that "Hononarium Creo Factum" does not appear to be an actual Latin saying? It sounds suspiciously like a motto of the fraternity that I almost joined during my undergrad years at NYU, but something seems off.

Alas, I digress. Look folks, to be upfront, Bruce Dickinson has been blessed with the opportunity to have a 50 year career in the recording industry, and I am an owner real estate property, in quite a few locations actually. Property ownership does confer certain advantages, but also I have seen the flip side of this, namely up-and-coming bands that either lived out of their cars or vans or lived in tiny apartments. Guess what I have seen over 5 decades? I have seen 5-6 recessions, and let me tell you folks, recessions are not kind to property "owners" who also have mortgage debt, who tend to get hurt during those times, but renters living in their small apartments can get by without all the baggage.

To wit, millions of americans' wealth were completely destroyed during the last recession because their home equity was wiped out, they had mortgages they could not afford to due to job loss or lower incomes, nor could they sell their houses as they were "under water". Rentals on the other hand offer a lot more flexibility in that you are not obligated to stay in one place, in addition to overall having cheaper options, so let's not paint this one sided picture that property owners have automatic advantages. They are advantages so long as real estate values and incomes go up and you don't have debt, but that doesn't always happen. I have known many property "owners" with mortgage debt, from lower income to higher income, lose their house or a substantial portion of the asset they thought they owned. You get caught in the wrong situation at the wrong time and an asset can become a liability, in a short amount of time. Also any mortgage interest deduction advantage is usually offset by property taxes, where the two essentially become a wash. If mortgages are above a certain level, there is no interest deduction beyond that point.

As mentioned before in one of the Dr. Dickinson lectures, there is a link between real estate values and rent, as it were, because property owners can choose to live in their property or rent it out. They can also choose to keep their apartment buildings or tear them down and build and sell condos, townhouses, or even homes. This means that rents increase because property values increase. They decline when property levels decline. There were some great rental bargains during the last recession, but those disappeared as property values regained some or all of their prior losses. This is why rent control doesn't work partially because there is a long term substitution effect between ownership and rental.

This is the story of the bay area, but other than that and a few select cities, the vast majority of housing in the USA has not recovered to its pre-recession highs. Ownership is not for everyone, especially if financed with too much debt, which really is another form of rent paid to a bank. This applies to businesses as well as individual households and I have seen countless examples of problems with debt. Bruce Dickinson urges everyone to broaden their perspectives, if you will, as there are two sides to every coin and the grass isn't always greener across the pasture. Tell the millions of Americans who lost their homes of their home ownership "advantages" and they would disagree, yes vehemently disagree, with that assertion, as it were.

I am strongly against any more significant development in Burlingame (residential or commercial). I think the amount of people and amount of business in Burlingame is just where it should be, and it might even be leaning on the side of overcrowding. Our schools are clearly overcrowded, and parking/driving is absolutely awful (granted there is construction, but it is largely completed and it doesn’t seem that final completion will make a significant difference). So guess what we should not be doing – adding more people. I moved out of SF to Bgame partly to own a home in a small town that doesn’t feel cramped. It seems Burlingame is on a path to becoming a miniature version of SF, the very thing we are trying to avoid. It’s pretty simple – we need to stop that from happening. We need to stand up like the people of Menlo Park and maintain Burlingame as the awesome small town that it is. In the case of Bgame - updating good; adding bad. There is just not enough room.

With respect to renters, it's a very tough issue. Adding “affordable housing” simply means adding more bodies into an already overcrowded town, which leads to more overcrowding. Burlingame is maxed-out. Stop adding to it. There is an awesome train stop that people can use to get to Burlingame, conveniently across the street from the downtown/commercial area. But yes, it would be nice if we could allow teachers, police, employees of Bgame businesses, elderly, etc to live in Burlingame without adding to it. Allowing your “market forces” to dictate what Bgame looks like simply means that there will never be any “affordable” housing in Bgame (this is the Peninsula after all), unless the real estate market crashes. But then when rents eventually go up, which they will (this is the Peninsula) those same teaches, etc. will have to leave because they won’t be able to pay the new rents. It’s a vicious cycle (for the renters) and unfortunately people (at least those who make decisions) seem to care more about money than about people, which is quite sad.

Not to fuel the fire that seemingly cannot be contained, so to speak, but I would be remiss if I didn't point out that perhaps some of the posters above need a new eyeglasses prescription and mistook the "e" for an "a", as in "to rant or not to rant"?

On a quasi-tangent (sorry Joe, but you must admit you do owe Bruce Dickinson some leeway on this for giving me a hard time for not initially biting your "Abbey Road" bait) I never understood the concept of a libertarian. As I understand it, socially liberal but fiscally conservative. Translation: I'm all about social equality, except when it comes to me and my wealth". It's like the term "Supermarket Catholic", where you can pick and choose the best of all worlds to define your own religion. Seems like a contradiction when you propose social liberalism but then say that only applies to race, gender, sexual orientation, but not really where it matters to you, ie how rich you are compared to everyone else. At least "limousine liberals" as it were, actually feel guilty about their wealth and probably do donate a ton of money to socially just causes (yours truly does, that is for sure) or regular liberals who really believe in wealth redistribution as a component of social equality. Even the Republicans basically say, I'm all about me, through and through, screw everyone else, but again it's consistent. Actually The "Libetarian Party" seems like a cop-out party, which may explain the low registration in that party, as it were, as most Americans get the joke.

Before I digress too much, I will say that the "market forces" are not just a Burlingame problem, but a Bay Area problem. Blame the low 25 inches of rain per year, no snow, mild winters and summers, coastal living, scenic vistas, leading global technology firms, et al. Folks, the Bay Area is a victim of its own success, as it were, as these characteristics make it highly desirable for people to live here and thus demand for housing will outpace supply, it always has and always will. Folks, it's the same "market forces" that exist where in parts of Detroit, Michigan, the house that you can buy costs a fraction of what you can actually build it for. In fact, you can actually move into an abandoned house and live for free for a limited time, of course.

Bruce Dickinson reminds everyone that the USA is a big country, and while it is sad that not everyone can afford to live where they really want to, there is freedom of movement that opens up options. Try this in a communist or dictatorial country. Yes, everyone is given a roof over their heads, but what is the price and would true freedom of movement result in "market forces" that make more people want to move into these countries than out of them? I think we all know the answer to this..it all comes to supply and demand. We have to support the less fortunate, but at the same time, it's a slippery slope to intervening in market forces and causing problems in the long run for would be renters and homeowners alike. You can't have your cake and eat it too, to wit, you can't intervene in the rental market without effecting rental prices for future renters or overall real estate prices. If you want to control both, you have to redistribute wealth, period. The "supermarket" pick and choose approach cannot apply here, in a similar vein to how the concept of the "Libertarian Party" is an inconsistent one.

Fiscally conservative means don't take on massive debt whether it be for the High Speed Fail make work like $100B train, or don't make big promises on pensions to workers that the government won't be able to deliver ($70M in unfunded pension liabilities in Burlingame alone and $900M in the same at the San Mateo County level).

Fiscally conservative means don't give free health care for life to a Burlingame city worker and their significant other for only 5 years of service and let them retire at 50.

Fiscally conservative means don't regularly run a massive deficit like SF's $100M per year deficit. Fiscally conservative means don't give out free stuff to anyone that wants to illegally enter our country (a crime according to the law).

Fiscally conservative means pay taxes instead of taking a ton of under the table salaries.

Fiscally conservative means provide a safety net for people that have significant disabilities or who are temporarily out of work, but make a vigorous effort to root out fraud in the system (people are have a job and also take gov't hand outs).

Fiscally conservative is about operating with a long term perspective and not pandering to the Unions, or to any other special interest group in order to simply get their campaign contribution and votes.

There is nothing "cop-out" about sticking to principle and registering as a Libertarian or even a Green for that matter. I would argue it is much less of a "cop-out" than registering "decline to state" or the Bay Area default "Democrat" in name only.

To define a Libertarian as simply "socially liberal" and "fiscally conservative" is a gross oversimplification. The principles of being socially liberal and fiscally conservative are actually in fact, absolutely mutually exclusive - you can believe in both concepts without fear of contradiction!

Libertarians believe that significant positive outcomes can come when you allow free market forces to take effect. We don't believe taxation is a force for social manipulation and definitely doesn't constitute what one would consider "charity" unless your idea of charity is having a gun held to your head to enforce that "donation".

Libertarians believe in the possibilities of the free market to create solutions for people. Government can function, and more often than not - functions as an obstructive coercive force rife with corruption. The larger the government grows, the easier it is to be such - Libertarians are generally against increasing the size and scope of government unnecessarily.

Libertarians are some of the most politically consistent individuals out there. We advocate maximum personal freedom, but with personal responsibility. That really doesn't mix with your view.

Where the other two parties only got a clue in the last few years - Libertarians have been advocating for LGBT rights since the 70s. They were against the Vietnam War, and generally speaking has there been any significant reason for us to be at war the last few times since then?

Let me point out the fact that "limousine liberals" are not as altruistic as you believe. Are you aware of Barbara Boxer? She's living off the spoils of elected office, having watched her salary more than double, become a millionaire and paid her family members hundreds of thousands of dollars out of her special-interest-funded political committees.”

On the topic of housing, there is absolutely no need for this absurd "wealth redistribution" to create positive housing outcomes for the people in the Bay Area. I dislike dialogue and the insistence that there is only option A and B - wasn't it option A and B in the form of political parties that got us in this mess in the first place?

It's the "San Francisco" liberal values that have priced the poor out of the area:

1) You have an obstructionist government which prevents reasonable developers from building additional housing (and then hand-selects the ones they want via Plan Bay Area). Supply is limited artificially.

2) You have obstructionist, dated, racist laws from the past. Housing could be opened up to the most vulnerable and poor populations by striking out a few lines in the municipal codes. Bring back SF flophouses.

3) You have destructive economic policies such as anti-landlord laws and rental control in SF.

Hey honestly Bruce, agree to disagree on the topic of Libertarians and please excuse my bias (as I am a Libertarian), but I think just a dash of Libertarian thought could go a long way in this insane Bay Area.

Certainly under NORMAL economic policy, prices would have long normalized. I haven't even gone into EB-5 investment visas which I have written about in the San Mateo Daily Journal that further compounds the issue of speculative real estate (the individuals who get residence and then in turn, naturally buy homes in the Bay Area).

On the note of low registration:

Proposition 14 dropped quite the bomb on third parties outside the big two, that has had more an effect than anything on third party registration numbers.

The big two have a vested interest in placing obstructions for ballot access and promotion of third parties. It's part of the system. Would you relinquish control of your political system to the upstarts? Probably not.

Might I also point out in a world of Uber, Lyft, and SideCar which are very "Libertarian" ideas - the establishment wants to shut it down for really no legitimate reason other than it threatens union and taxi cartel interests.

The same goes for AirBnb. Rooms are being rented to folks who can't afford expensive hotels, and the government seeks to crush it, regulate it, tax it "for your own good".

If you want to see how local government treats great ideas - look at how FlightCar got chased out of Millbrae. They were harassed, probed, and ultimately the issue is long-term parking tax.

The code academies (some which are absolutely free to women and minorities) are being harassed by California Education regulators despite having 95%+ employment rates... and helping those groups that are underrepresented in STEM fields! You'd think the "tolerati" liberals would be dancing in the street singing praises of the code academies - not so. Again, the mantra is regulate, tax, control.

I'm not sure about you, but these solutions which add real value to people's lives are sure a hell of a lot better than the "limousine liberal" endorsed options that weren't working.

If this is baking your own cake and eating it, then I'm going to keep baking and eating my cake all damn day - because the alternatives are simply NOT working.

Listen, Doug-baby, let me say this up front, and as everyone on this site knows, I'm not one to mince words. Let Bruce Dickinson say this: you have got what appears to be some dynamite ideas. I don't care what they're officially labeled or not and I don't disagree that the limousine liberal approach ain't working...period. I am a disaffected, yes very disaffected Democrat, but I think it's due to the way the party operates in California, which has literally taken this State hostage. This is not the party that I joined when I was starting my career in the early 60s.

Having said that, I think the political posturing and stupid video links by many of the posters (not you, to be clear) are about welcome as a toddler taking off his diaper pooping on your marble floor, as it were. I welcome prescriptions with real solutions, not a bunch of tea party ranting with playground arguments and name calling. It is clear that the voice readers as well as the editors are, to put it succinctly, sick of it.

So please, keep the great observations and ideas coming, it was a welcome breath of fresh air when I started to see some dynamite thinking on this site! And coming from Bruce Dickinson, yes *the* Bruce Dickinson, that means a lot!

I've worked with many real rock stars while producing real concerts, and I'm guessing that you are actually Russ Cohen. I like Russ, so that works.

Anyway, your poop on the marble imagery was certainly vivid, but perhaps its time that you face the reality of the Dem-wits and abandon their equally fake promises of peace and love while ordering war and giving away billions to fund other people doing the killing.

The real stench is in the breath of corruption in our community, whether in Sac, SF, Burlingame or behind, and it's all the smell of money, in payoffs, construction contracts, and acid-inspired Social Justice that reeks of mental lapses and hypocrisy.

Arrogance never persuades for long, Bruce Baby.

Finally, the people of California are waking up to the scam that has been perpetrated on us in the name of make-work contracts.

Design & Tech Charter School in Millbrae - that's what will give that generation housing and savings and a future, not promises of free stuff and unsustainable entitlements via Hoffa and The Gangsters.

I loved Ralph Nader's book Unstoppable, highly recommend it as a read. We've got to find ground we can agree and develop solutions from there. I think and hope the majority of people are advocates for transparency, accountability, and civil liberties.

You might find it strange that a pro free-market Libertarian is a fan of pro-regulation Ralph Nader, but it really isn't. A competitive free market is not a completely wild wild west laissez-faire free for all.

Anyway in this era of political bad faith (Don't think it's been worse than it is now in history), there's a glimmer of hope in joint alliances where we can agree on things.

At the local level, restoring local control, refraining from gratuitous spending, and establishing sound financial policies I think are a priority.

I'm from Millbrae, and some would think this is bizarre coming from a Libertarian but I had advocated for the establishment of an OPEB trust fund and phasing out defined benefit plans. The city made promises to past employees it can't keep. They sit on CDs and LAIF for their 15% reserves which is insane. Instead they choose the "pay as you go" method and suffer from annually increasing NOO for GASB 45 reporting purposes. ARC is already exceeding current PAYGO amounts.

It is my understanding that establishing an irrevocable OPEB trust and modification of the city investment policy may allow a more diversified portfolio of higher yield investments in the trust. I know that government entities are limited in their investment pool options since the Lehman bros fiasco - but without a doubt a trust that lockboxes existing and past employees benefits would SAVE the city money. It's very clear to me there is a lack of financial understanding in Millbrae. They refinance one bond, and they're all patting themselves on the back like it's a heroic move.

The details of creating a financially sustainable town is often not the sexiest platform to run on, but it is something I'm passionate about. I want to save the Millbrae government from their own future insolvency - that's the path they're heading down if the shenanigans continue.

I went to the Millbrae Farmers Market this weekend. I parked two blocks away from the parking lot where the event was being held...
Two City of Millbrae Blocks. Every single business was Asian owned/sold only Asian products.
AS I approached the Farmers Market all I could smell was Cigarette Smoke. It was unbelievable that so many Asians were smoking.
AS I walked through the market, with the exception of Cuneo's Baked Goods, every single booth was Asian.
I am complaining.
Asian people treat white people horrible. The signs that advertise products are not written in "American." Same thing in the restaurants.
Why do you think that is?
Is the fact that I am a white female asking this question mean I am Racist?
Is there someone out there who will be able to make an excuse?
If so I am looking forward to your reason.

Tonight is the night the council is voting on the Sacramento blackmail act for "affordable housing". In the meantime, here is a bit of the Daily Journal article on the subject:

During the fourth quarter in San Mateo, studio apartments increased by an average of $193 from last year, to $1,762 per month, marking a 12.3 percent increase. One-bedroom apartments with one bathroom increased by 10.3 percent on average to $2,332 per month, up $218 from 2013. And two-bedroom, one-bathroom apartments increased $181 per month, to $2,593, a 7.5 percent increase from the previous year, according to the report.

But some renters have seen increases as substantial as $600 in a year, said Josh Hugg, program manager at the Housing Leadership Council of San Mateo County.

Hugg and other advocates for renters promote policies that protects residents from exorbitant rates or increases.

“We need more affordable housing,” Hugg said.

Well-paying technology jobs are frequently cited for driving up costs across the region, but Hugg noted that for every job created in the tech sector, there are multiple support workers who are finding it increasingly difficult to live locally.

“When we bring in all these great jobs, they are creating jobs of more modest means,” Hugg said. “We are not making a place for them, even though they are the fastest growing part of the workforce.”

Some residents are being priced out of their homes, and are forced to move back in with their families to afford the cost of living, said Sally Navarro, a rental, sales and property management Realtor for AVR Realty in Burlingame.

“Everyone is piling in until they find something. Folks are just waiting it out to see what’s going to happen,” she said.

But the outlook is not optimistic for those hoping to see prices drop, she said.

Navarro, who has worked in the local rental industry for nearly three decades, said she has never seen a tougher rental market than what is currently available.

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